Selling percentage of shared ownership back to housing association

triga2005

Hello.
I was wondering if anyone could assist? 

Seven years ago I bought 30% share in a 3 bed terraced house within a private housing association scheme.
Since then my wife and I have had children and are looking to sell back share to housing association with a view of buying a bigger property as we have outgrown this current one.
At the time the I moved in the property was valued at £230.000.
18 months ago it was valued at £390,000 by an estate agent.
I fully understand I will have to pay for a surveyor for the housing association, admin fees and possible legal fees as well as my own. I’m also led to believe HA can be tricky to deal with when trying to sell back your share
I suppose I’m asking has anyone had a similar experience of moving out of part own part rent and could anyone possibly advise any dos or dont’s in regards to the property in advance to try and maximise the surveyors valuation so I can possibly try a get as much return as possible after I pay off the outstanding mortgage.
Many thanks.

[Deleted User]

triga2005 said:

Hello.
I was wondering if anyone could assist? 

Seven years ago I bought 30% share in a 3 bed terraced house within a private housing association scheme.
Since then my wife and I have had children and are looking to sell back share to housing association with a view of buying a bigger property as we have outgrown this current one.
At the time the I moved in the property was valued at £230.000.
18 months ago it was valued at £390,000 by an estate agent.
I fully understand I will have to pay for a surveyor for the housing association, admin fees and possible legal fees as well as my own. I’m also led to believe HA can be tricky to deal with when trying to sell back your share
I suppose I’m asking has anyone had a similar experience of moving out of part own part rent and could anyone possibly advise any dos or dont’s in regards to the property in advance to try and maximise the surveyors valuation so I can possibly try a get as much return as possible after I pay off the outstanding mortgage.
Many thanks.

Does the HA have to buy it back or does the HA just get first refusal? If the HA doesn’t buy it would you then have to sell the 30% share to a member of Joe Public in which case a higher valuation might not help you because if Joe Public didn’t want to pay as much of the valuation then it’s your 30% that would take the hit in accepting a lower offer not that HA’s 70%. 

Norman_Castle

Does the purchase agreement explain the process for valuing the property for any buyback and the process if the values are disputed.

eddddy

Are you sure that your Housing Association buys back shared ownership properties - that sounds very unusual?

Generally, if your shared ownership property is overvalued, it will be difficult or impossible for you to sell it (and you might lose money as a result).

I think the process generally works like this:

• A valuer values the property
• The Housing Association gets the first chance at selling the property
• If they can't find a buyer, you can instruct an estate agent
• When the property is eventually sold, you get 30% of the price and the housing association get 70%
• The housing association has to approve the buyer

So if the valuer values the house at £390k - the housing association will want 70% of the £390k = £273k. 
And you should get 30% of £390k = £117k

• Some housing associations would say you can't accept an offer below £390k. So if it's over-priced at £390k, nobody will buy your property.

• Other housing associations would say that you can accept an offer below £390k - but you have to suffer 100% of the shortfall.
• e.g. If you sell for £370k instead of £390k... the housing association still gets their full £273k, but you lose the full £20k and only get £97k.
• So you would have been better off, if the property had been valued at £370k (instead of £390k) in the first place.

So you really need to find out your housing association's policy before you start.

L_T_88

Agreed that it would be unusual for a relatively new lease to have first refusal (pre-emption). Pre-emption existed for 21 years from final staircasing, so if your lease does contain this clause you're unaffected by it now.

Pre-emption was removed from the model leases in 2015, so it is possible your lease contains them. Check and if so, ask your HA what their position is on carrying the lease to remove these. I believe the Government produced guidance and a precedent Deed on this so the admin should be minimal. It may be that they only consider it on final staircasing, as that is when it would have effect.

On resales generally, the HA will have a set period to market the property, I've mostly seen 4 weeks.

Following this, you are generally free to market and often are allowed to sell at 100% rather than shared ownership - known as simultaneous staircasing and sale.

This opens up a wider market and means the HA don't have to approve the buyer.

The valuation will be RICS red book, rather than an Estate Agent valuation. As such, I wouldn't worry about overvaluing.

As with most things relating to Shared Ownership, the first step is to check your lease, and then any T&Cs the HA has. There should be a guide to selling on their website, unless they are a particularly small HA.

triga2005

Thanks to all that have replied I’m incredibly grateful for the time taken out to help me you have certainly opened my eyes in regards to steps needed.
Spoke to HA
I need a RCIS valuation (that I knew) HA have 6-12 weeks to find replacement buyer once everything is approved regarding the survey.
If not I can sell on open market but if I sell for less than valuation they will take their full cut still as advised above.
I will also need to pay over £1000 for their legal fees admin etc as well as my own plus £500 odd for the survey.
It seems like when buying in on these schemes selling is not as easy as one would think.
Thanks all again.
Might need to come back soon me thinks.